Outremont and the Federal Reserve: Do Good Things Come in Pairs?
Upon returning from Montreal, where I volunteered for the NDP on by-election night, I discovered that the US Federal Reserve cut interest rates by a whopping half point. I do not have a fully-formed analysis of either Mulcairâ€™s victory or the rate reduction, but would like to kick-off some discussion on this blog.
Mulcairâ€™s win strikes me as an important stepÂ toward building a credible, national left-wing alternative to the Harper government. Although some observers may discount the result as a by-election fluke, it will nevertheless cause Quebecers (and other Canadians) to take another look at the NDP.
It is good to see the Federal Reserve taking serious action to shore-up the American economy, rather than obsessing about the phantom inflation threat. One hopes that this example will induce the Bank of Canada to reverse its misguided interest-rate hike. Of course, the risk is that the Bank of Canada will not respond, allowing the narrowed Canada-US interest-rate differential to underpin the Canadian dollarâ€™s excessively rapid rise.